August 2017

Many of the world’s populations are vulnerable to climate shocks – to drought, flooding, irregular rainfall and natural disasters. For these countries, cities and communities, index-based insurance is a critical risk-management tool which allows victims of such shocks to continue to have access to finance and to build resilience against future risks.

Index, or parametric, insurance pays out benefits based on a pre-determined index for the loss of assets and investments as a result of weather or other catastrophic events. In contrast, traditional insurance relies on assessments of the actual damage.

The 2030 Agenda for Sustainable Development rightfully points out that sustainability has three dimensions: economic, environmental, and social. The first two are well understood and well measured.

Economic sustainability has a whole strand of literature and the World Bank and IMF devote a lot of attention to debt and fiscal sustainability in their reports. Just open any Article 4 consultation or any public expenditure review and you will find some form of fiscal or debt sustainability analysis.

The same can be said about environmental sustainability. Since Cancun (COP16), countries prepare National Adaptation Plans, and since COP 21, they have prepared Nationally Determined Contributions (NDCs) which focus on domestic mitigation measures to address climate change.

These days, it’s rare to open a newspaper (or scroll through a blog) without reading about a disaster striking somewhere in the world. Often, these disasters affect the very same countries that we support in our projects every day at the World Bank, and we watch helplessly as decades of development progress are erased within minutes, hours, or days. Disasters cause substantial losses in every country the World Bank operates in. It is truly not a question of if, but when, the next disaster will strike.

It’s important, then, that when we, along with our private-sector and government partners, always ask, “are our projects resilient to cyclone? What about extreme heat, or volcanic eruptions? In 50 years, will this project still be protected from increasing instances of flooding, landslides, and drought?”

She was seven when she survived a night of horror. Her home in Nigeria was marked for an attack that night for belonging to the ‘wrong’ ethnic group. My friend and the rest of her family were destined to be killed.

But she survived. Her neighbors who noticed the mark alerted them and helped them escape at a time when their other neighbors were being executed and even burned alive. That night, my friend saw a man die in very violent circumstances. The shock was so intense that she could not speak for two weeks.

By the end of today, 96 African elephants will have been killed. Due to this rate of poaching, the current African elephant population is estimated to have fallen to just 415,000 (IUCN 2016) and the situation is even worse for Asian elephants with an estimated population of about 50,000 (IUCN Red List). This is extremely heartbreaking because not only do elephants have intrinsic value but they are also one of the few flagship and keystone species. If they disappear, the entire ecosystem will collapse.

As we celebrate World Elephant Day on August 12th, I reflect upon what I have learned and realize that to be able to save the largest terrestrial mammal on Earth, we need to protect their habitats, stop the violent poaching and trafficking, support communities that are affected by human-elephant conflicts, and stop the demand for ivory.